Delaware Court Will Not Seek Minimum Price in Citgo Auction

Shares of Citgo Petroleum’s Parent Company to be Auctioned Without Minimum Price

The auction of shares in oil refiner Citgo Petroleum’s parent company, aimed at paying off Venezuela-linked creditors, will not have a “stalking horse bid” to set a minimum price, according to the U.S. federal court officer overseeing the process. U.S. District Court Judge Leonard Stark has initiated what may be the largest court auction ever, scheduling a final sale hearing for July 15 next year. The court filing confirms that there will be no reserve price set in the auction.

Bidders Encouraged to Participate in the Sales Process

Potential bidders will be approached by the court or can proactively seek inclusion in the sales process, as stated by Special Master Robert Pincus, the overseer of the auction. The bidding will occur in two rounds, with the first round for submitting non-binding bids scheduled for January 22. Creditors, with claims totaling around $23 billion, have turned to U.S. courts, despite Citgo Petroleum’s estimated value being almost half that amount.

Evercore Group Engaged to Market Citgo Petroleum

Investment bank Evercore Group has been hired to conduct a marketing process for Citgo Petroleum. The process has received pre-clearance from the U.S. Treasury Department, which has safeguarded Citgo, Venezuela’s prized asset, from being seized by creditors owed billions of dollars. Venezuela’s President Nicolas Maduro has criticized the auction, claiming that the refining company has been “kidnapped” by the United States. The Treasury recently extended a license protecting the refiner until January, encouraging negotiation between Citgo’s supervising boards and some of its creditors, potentially limiting the scope of the auction.

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The auction of Citgo Petroleum’s parent company shares will proceed without a minimum price.
Potential bidders are encouraged to participate in the sales process overseen by the court.
Two rounds of bidding will take place, with the first round scheduled for January 22.
U.S. courts have seen creditors filing claims of around $23 billion against Citgo.
Investment bank Evercore Group has been engaged to market Citgo Petroleum.
The U.S. Treasury Department has extended a license protecting Citgo until January.
Venezuela’s President Nicolas Maduro has expressed discontent with the auction.